Gartner worldwide sales data crowns Lenovo the king of a slowly shrinking hill.

Gartner has just released its preliminary worldwide PC sales numbers for the third quarter of 2012, and for most manufacturers the news isn't good: of the companies named, only Lenovo and Asus performed better in this year's Q3 than they did last year's. HP has given up so much market share that Lenovo was able to pass the company to become the largest PC OEM worldwide. This is the first time that Lenovo has taken the worldwide market share crown, and the first time that HP has lost it since the end of 2006.

Gartner blamed a lackluster back-to-school season and a weak consumer PC market for much of the decline, which also affected Dell (down 1.4 million units year-over-year) and Acer (down 1 million units year-over-year) among others. The fallout from HP's corporate troubles is clearly visible: its third-quarter shipments are down nearly three million units compared to the third quarter of 2011, and while most PC makers are doing worse this year than last, none of them suffered such a precipitous drop in sales.

Asus shipped about 670,000 more PCs in Q3 2012 than in Q3 2011, making it the only other listed vendor whose sales are up worldwide since last year.

HP is still on the top in the US, but is hemorrhaging market share nonetheless.

In the US, the story is slightly different. Lenovo is the only individual vendor listed whose market share improved in the quarter ("Others" also improved slightly, but individual companies weren't named), but it's still a fairly distant fourth place behind HP, Dell, and Apple, respectively. HP and Dell have lost market share domestically since last year, and while Apple is down for the quarter, it's still up overall. Its dip in sales is likely attributable to the fact that its entire desktop line has gone for at least a year without any hardware refreshes.

Whether Windows 8 and the holiday season can pull PC sales out of their current slump remains to be seen, but IHS iSuppli is forecasting that 2012's total shipments will be 1.2 percent lower than 2011's numbers, the first decline since the burst of the dot-com bubble in 2001.

All of this gloomy data is offset a bit by the fact that neither Gartner nor IHS include sales of tablets or smartphones in their sales data, instead listing only traditional form factors like desktops, laptops, and variants thereof. For example, even if you added only the 17 million iPads Apple announced it had sold in its most recent earnings call, total sales would actually be up 8.7 percent; figuring in the Android ecosystem would bump it considerably higher. Given these numbers, it's easy to see why PC OEMs are eager to jump on the tablet train: it's not a great time to be selling traditional PCs.

42 Reader Comments

The holiday season will be the real focus of interest. I will be very surprised if its outcome improves the results in a major way. But the precedents of Zune, Windows Phone, and Kin don't bode well for the reception of all the dazzling new products that are being built around Windows 8. Even if Windows 8's arrival works much better, there is a long way to go for it to be the product that changes current PC trends. Microsoft better hope it does not have too many customers like me. I think I have bought at least one of every Microsoft release since Windows 3.1. I ran 2000, XP, Vista, and 7 in beta form and have three copies of Windows 7. One of them was bought last fall when I ugraded my system to have as good a shot of possible of never needing to run Windolws 8.

First, consumers are increasingly using smartphones and tablets to replace their PCs. Not for everything; but enough people who are not hardcore computer users and just want to check e-mail or news sites are finding that a tablet will suffice. I would even go so far as to say that your average consumer who has a work laptop doesn't even need a personal computer anymore. They can absolutely get by with an iPad because they probably have access to a PC for the infrequent times they need one through their job.

Second, in about 2008-2009 your average office PC became so insanely powerful (multi-core with >4GB RAM) that the computing power available in a low-end office PC began to outstrip the need. So companies haven't upgraded because they get little to no business benefit from doing so. This goes double for being in a down economy. Used to be you could justify a PC refresh because your applications would run faster, but not anymore. The corporate upgrade cycle which used to be 3-5 years is now closer to 5-7. So companies are buying significantly fewer PCs.

It's a double whammy: PCs became too fast for their own good, and smaller devices became good enough to displace PCs in the consumer segment. Unfortunately for the likes of Dell and HP, that trend isn't likely to stop for another 5-10 years, so if either of them wants to stop the bleeding they will need to take some drastic action. HP was right to consider spinning off their PC division, but they were doing it for the wrong reasons. But the bright spot for HP is that they're close to hitting rock bottom. Dell is in a much tougher bind because their server channel sales aren't where HP's are and unfortunately, Dell needs to get a lot leaner very quickly, because they're much more reliant on PC sales than HP is and that pie is shrinking quickly.

Well, how many people have laptops/desktops that are several years old because they do everything those people need? Outside of certain specific fields where moar powar is always desirable (or major gaming addicts). Your basic office apps, web browser, and e-mail client aren't really going to benefit from moving form a Core 2 Quad to i3, i5, or i7. People are also moving more common tasks like e-mail and general communications to smart phones and tablets. Standard PC sales aren't going to pick up again till the common man finds a need for more powerful systems. AKA, PC's need that killer app, so to speak. A down economy doesn't help.

I would not want to be in the pc business right now. They are getting squeezed from all sides. Smartphones, tablets, existing pcs that do not need replacing, and Microsoft following apple into the hardware market. It will be interesting to see how this turns out, and what these companies do to survive.

"HP has given up so much market share that Lenovo was able to pass the company to become the largest PC OEM worldwide."

I disagree. According to the table in the article:

HP: 5,129,338 --> 4,141,926Lenovo: 1,279,884 --> 1,357,882

Last time I checked, 4 million was still larger than 1 million. I'm a fan of Lenovo. I'm typing this on a x220 running Kubuntu (yes, we are legion). But, I don't see how this makes Lenovo the largest OEM. According to the chart, Dell, HP, and Apple ALL shipped more computers in Q3 2012 than Lenovo did.

What would make this table really interesting would be gross revenue and gross margin estimates. It doesn't matter how many units you sell if you lose money on each one. Similarly, it doesn't matter if market share declines if net profit goes up.

Is HP actually profitable in the laptop space? Is Dell? Hopefully every company listed is smart enough to not be singlemindedly focused on units shipped... but it would be really interesting to see.

(Yes, yes, I could go look at old 10-Q's, come up with ASP and GM estimates, and come up with my own projections... but I'm an anonymous internet commenter, not an industry analyst)

Exelius pretty much hit the nail on the head. Most people had no choice going back 5-10+ years ago - if they wanted to use the Internet and check email, etc. they had to buy a PC. Now we have smartphones, tablets, phablets and even e-readers which can cater to the limited needs of most of the population. Sure, if you want to play video games, design, program or perform other heavy tasks you are going to need a full fledged system. Furthermore, the technology has reached a point where it is capable of stretching much longer while remaining relevant. (We're not constantly in need of upgrading removable-media drives anymore, we don't have to upgrade our network cards/modems like we used to benefit from). Personally I have never had much success with the crap that Gateway, HP, or Dell sold, and it was always bogged down with too much bloatware and custom crap. Rather than paying for that, I opt to custom build my own machines, and I have been paid to do so for quite a large number of people as well.

The PC will never become totally useless or obsolete but, rather, it will shrink down to the core niche of people who actually need them - the rest will save money and buy the simpler, cheaper solutions (like tablets) that do what they need for everyday use.

Edit - Lenovo, as far as my experience goes, is making some decent products for cheap prices so their success does not come as much of a surprise to me.

"HP has given up so much market share that Lenovo was able to pass the company to become the largest PC OEM worldwide."

I disagree. According to the table in the article:

HP: 5,129,338 --> 4,141,926Lenovo: 1,279,884 --> 1,357,882

Last time I checked, 4 million was still larger than 1 million. I'm a fan of Lenovo. I'm typing this on a x220 running Kubuntu (yes, we are legion). But, I don't see how this makes Lenovo the largest OEM. According to the chart, Dell, HP, and Apple ALL shipped more computers in Q3 2012 than Lenovo did.

You're looking at the US numbers, not the worldwide numbers. HP, Dell, and Apple are all still bigger in the US, as I noted in the article. :-)

To be honest, most of the consumer-grade laptops and desktops made by HP sucked in the last few years so it's not hard to see why they are down. I've dealt with way too many broken HP/Compaq laptops (DV6000 especially) to ever recommend HP. Same goes for Dell and their PC's with shitty motherboards with no upgrade paths and bad capacitors.

Out of the PC crowd, Asus is the only company that seems to be trying to innovate. They started out with low-cost netbooks (eee pc), then hybrid tablets (Transformer), followed by hybrid phone/laptops (Padfone) to who knows what next. I used to think Asus made niche products but now I'm starting to think their niche is becoming the mainstream.

I'm not much of a business person but I just thought that PC manufacturers take this stuff into account. Did they all really think that people will keep buying laptops and desktops year after year at the same rate ? Shouldn't they have plans for when demand of their primary products starts to decline ?

and while Apple is down for the quarter, it's still up overall. Its dip in sales is likely attributable to the fact that its entire desktop line has gone for at least a year without any hardware refreshes.

I always chuckle at the skeptics of the "Post-PC" era, every time the hard numbers come out showing how quickly the PC slice is shrinking and taking down the traditional computer manufacturers (that is, those not yet well established with tablets and smartphones) with it.

We will always need full-strength desktops and laptops, but it will be along the lines of how we will always need railroad trains even though everybody actually drives now.

I always chuckle at the skeptics of the "Post-PC" era, every time the hard numbers come out showing how quickly the PC slice is shrinking and taking down the traditional computer manufacturers (that is, those not yet well established with tablets and smartphones) with it.

We will always need full-strength desktops and laptops, but it will be along the lines of how we will always need railroad trains even though everybody actually drives now.

Right. They'll still be around, and there's probably some growth left in them (though OEMs are eventually going to have to refine their lineups and increase build quality to compete, since the race to the bottom of the price barrel has left none of them with anywhere else to go), but other alternative devices seem like they'll be driving most of the big growth for the foreseeable future.

To be honest, most of the consumer-grade laptops and desktops made by HP sucked in the last few years so it's not hard to see why they are down. I've dealt with way too many broken HP/Compaq laptops (DV6000 especially) to ever recommend HP. Same goes for Dell and their PC's with shitty motherboards with no upgrade paths and bad capacitors.

Out of the PC crowd, Asus is the only company that seems to be trying to innovate. They started out with low-cost netbooks (eee pc), then hybrid tablets (Transformer), followed by hybrid phone/laptops (Padfone) to who knows what next. I used to think Asus made niche products but now I'm starting to think their niche is becoming the mainstream.

The Zenbook Primes are probably my favorite Ultrabooks, though the Acer S7 series also looks surprisingly nice.

"HP has given up so much market share that Lenovo was able to pass the company to become the largest PC OEM worldwide."

I disagree. According to the table in the article:

HP: 5,129,338 --> 4,141,926Lenovo: 1,279,884 --> 1,357,882

Last time I checked, 4 million was still larger than 1 million. I'm a fan of Lenovo. I'm typing this on a x220 running Kubuntu (yes, we are legion). But, I don't see how this makes Lenovo the largest OEM. According to the chart, Dell, HP, and Apple ALL shipped more computers in Q3 2012 than Lenovo did.

The numbers you quote come from the U.S. table, whereas the point you went from - and quoted - was for worldwide sales, I believe.

EDIT: Aha, obviously should have read further before responding, been covered...

I ran 2000, XP, Vista, and 7 in beta form and have three copies of Windows 7. One of them was bought last fall when I ugraded my system to have as good a shot of possible of never needing to run Windolws 8.

Bought my new Dell (yep) 4 hours into the window in which we qualify to purchase Win 8 Professional for $15 - found out about it the next day and was quite pleased. After settling in and first realizing previous to this version if you bought soon to be outdated systems the upgrades were *free*, and then seeing how much effort MS seems to be applying in Win 8 to woo and corral tablet/phone users with what appears to be very little indeed for an ordinary desktop user, then factoring in the "skip every other release" and skip many headaches... well, I have a feeling I would take Win 8 if they gave it to me free, but even then I am not certain I would install it - just have it to hand if things turn out well.

I think I'm passing on paying $15 for an upgrade I believe has traditionally been free for buyers of almost pcs with about-to-be-outdated Windows versions. (I have a little time to decide yet though, if things should seem worthwhile later - January or some such.)

Then too, I am something of an old curmudgeon in my only slightly old years here - this new Win 7 system replaces what were multiple XP systems over the last decade.

but other alternative devices seem like they'll be driving most of the big growth for the foreseeable future.

Eh. So today we've got a couple new species of device which are more portable and cheaper than the average PC, but, in exchange, offer only a specific (but useful) subset of a PCs capabilities. Eventually someone will cram the full functionality of a true PC into a tablet. At some point after that, it'll be so cheap to produce that there's no practical cost savings in producing its consumption-only cousin, and the consumption-only device will find a home in an even more convenient form factor (google glasses? who knows). That's hardly "post-PC".

Eventually someone will cram the full functionality of a true PC into a tablet.

I'm really looking forward to that inflatable screen!

Isn't that what the Microsoft's Surface Pro is trying to achieve? Even the standard Surface in combination with the covers might be able to do that, depending on if you count Windows RT as a full functionality OS or not.

Eventually someone will cram the full functionality of a true PC into a tablet.

I'm really looking forward to that inflatable screen!

Isn't that what the Microsoft's Surface Pro is trying to achieve? Even the standard Surface in combination with the covers might be able to do that, depending on if you count Windows RT as a full functionality OS or not.

To achieve what? An inflatable screen? Must have missed that ...

My point is that you just can't cram the full functionality of a PC into a tablet, simply because it lacks the physical properties (like screen size). And if you add all those properties, what you get isn't a tablet any more.

Eventually someone will cram the full functionality of a true PC into a tablet.

I'm really looking forward to that inflatable screen!

Isn't that what the Microsoft's Surface Pro is trying to achieve? Even the standard Surface in combination with the covers might be able to do that, depending on if you count Windows RT as a full functionality OS or not.

The original tablet market was full up PCs in tablet form. Very few people bought them. I do not think going back to that model is going to help sales any.

Windows 8 is going to keep downward pressure on these numbers, I fear, as people delay buying a whole new computer until the next OS.

In the meantime, maybe the OEMs will scale back production, build better-engineered, better-assembled products, and, I dunno, elevate quality across the board. Get rid of all the stupid useless plastic and wasted space and poorly-fitting bezels. Everyone talks about wanting to be like Apple... so how has "sleek and minimal" not sunk in with the majors?

I love the Orwellian speak of these surveys that allows then to exclude 'media tablets'.

As someone who has been using pc's since windows 3.0 and macs since that one with the 4/5" inch beige screen(?), the one thing I can contribute is that the iPad and all those media tablets and smartphones meet the classification of a personal computer.

Everyone I know has a desktop (or two) and or laptop in addition to their smart phones and tablets. The desktops and laptops only need to be upgraded or replaced every five to eight years now since they're all stupid powerful. The xbox 360 and ps3 have kept the hardware requirements for gaming exceptionally modest for many years now, removing a big reason for upgrades and new purchases as well.

But, the pc isn't going anywhere. What we are seeing is the market maturing. This is not the death of the pc but rather the end of the gold rush at the beginning. So, a lot of the pc sellers are going to go out of business but not because the pc is dying rather because they are badly run businesses and only the gold rush was keeping them afloat.

To be honest, most of the consumer-grade laptops and desktops made by HP sucked in the last few years so it's not hard to see why they are down. I've dealt with way too many broken HP/Compaq laptops (DV6000 especially) to ever recommend HP. Same goes for Dell and their PC's with shitty motherboards with no upgrade paths and bad capacitors.

Out of the PC crowd, Asus is the only company that seems to be trying to innovate. They started out with low-cost netbooks (eee pc), then hybrid tablets (Transformer), followed by hybrid phone/laptops (Padfone) to who knows what next. I used to think Asus made niche products but now I'm starting to think their niche is becoming the mainstream.

The Zenbook Primes are probably my favorite Ultrabooks, though the Acer S7 series also looks surprisingly nice.

the Lenovo IdeaPad Series is a really nice consumer notebook. I just wish that every OEM would bump the resolution on their screens. Asus will probably soon, as they have a 1920x1200 tablet.

I love the Orwellian speak of these surveys that allows then to exclude 'media tablets'.

As someone who has been using pc's since windows 3.0 and macs since that one with the 4/5" inch beige screen(?), the one thing I can contribute is that the iPad and all those media tablets and smartphones meet the classification of a personal computer.

....and let's be honest, they're now just as powerful if not more so than the machines just a decade ago. They're certainly more powerful than my Atari 130XE, Amiga 500 or my old intel 386.

Must a PC have such a 'full-featured system such as MS-DOS (that clearly outclasses iOS) to be on this survey?

And for the Uber-geeks.....shouldn't the Raspberry Pi be included in Gartner's figures!!

The reason they're excluded is because it's a market survey, not a popularity contest. To perform a good market survey, you must define your market. Gartner has defined the PC market for the terms of their survey as laptop and desktop computers. There's good reason for this; as such a survey would be used for projections of software, peripheral and component sales that might not be relevant if tablets were included. If you wanted to include tablets and smartphones, I'm sure Gartner has a separate survey you could get that covers those devices, and then you could add the numbers yourself in Excel.

But, the pc isn't going anywhere. What we are seeing is the market maturing. This is not the death of the pc but rather the end of the gold rush at the beginning. So, a lot of the pc sellers are going to go out of business but not because the pc is dying rather because they are badly run businesses and only the gold rush was keeping them afloat.

Look at the kids today. I never see a kid whip out his Lenovo/HP/Dell/etc laptop to check facebook or twitter.

I bet new Windows 8 laptop/desktop is not on any junior high school kid's Christmas wish list.

I'm a Lenovo fan but I'm always surprised they do well in the market because it is difficult to see or touch their models. I STILL haven't touched a X220 ina retail shop and I bought a X120 sight-unseen.

As someone who has been using pc's since windows 3.0 and macs since that one with the 4/5" inch beige screen(?), the one thing I can contribute is that the iPad and all those media tablets and smartphones meet the classification of a personal computer.

This is just my personal opinion, but I don't consider a device to be a personal computer if you can't develop programs for it on it (so iPads, WinRT tablets, &c. don't qualify). I also don't consider an operating system to be "full" if it erects an artificial barrier to installing programs (so again, in my opinion, even the x86 version of Windows 8 has some issues in that area, and iOS is right out).

Edit: My first computer was a TI-99/4a, supplemented a few years later by a Commodore 64; with the correct software and accessories, both could be used to write low-level code for themselves. So, yes, in my opinion, they are true personal computers, and an iPad is not.

Maybe this is a dumb question, but when we say "PC" are we just referring to desktop / boxes, or are we lumping in laptops and (net/ultra/etc)books, too?

I agree that we've hit a power curve where what folks have is "good enough", and there's no real, new, killer app out there to justify folks popping major dough on a new uber comp unless they're doing some kind of specialist activity (like PC gaming, heavy media work, etc).

But, I also feel more folks are passing by the desktop/box in preference of a portable laptop. That would naturally mean the desktop market is going to get cannibalized.

But, the pc isn't going anywhere. What we are seeing is the market maturing. This is not the death of the pc but rather the end of the gold rush at the beginning. So, a lot of the pc sellers are going to go out of business but not because the pc is dying rather because they are badly run businesses and only the gold rush was keeping them afloat.

Look at the kids today. I never see a kid whip out his Lenovo/HP/Dell/etc laptop to check facebook or twitter.

I bet new Windows 8 laptop/desktop is not on any junior high school kid's Christmas wish list.

I think the new smaller iPad will be though.

A new smartphone and a new game console will be.

Computer? Not so much. They're probably still using the uber-comp/lappy they got 3 years ago. But every year there's always a newer, better smartphone.

Maybe this is a dumb question, but when we say "PC" are we just referring to desktop / boxes, or are we lumping in laptops and (net/ultra/etc)books, too?

I agree that we've hit a power curve where what folks have is "good enough", and there's no real, new, killer app out there to justify folks popping major dough on a new uber comp unless they're doing some kind of specialist activity (like PC gaming, heavy media work, etc).

But, I also feel more folks are passing by the desktop/box in preference of a portable laptop. That would naturally mean the desktop market is going to get cannibalized.

I think there was a very large thread on this topic somewhere. In the generic sense of a PC as a personal computer, many things qualify such as portables, netbooks, tablets, phones along with the traditional desktop computers. The marketing research companies seemed to lump desktop, portable, netbook, and old style tablets into PC and the new style tablets (iPad and the like) as well as phones etc. are excluded from the PC category. Not suer what is going to be done with the Windows 8 tablets, could end up in either category.

Andrew Cunningham / Andrew has a B.A. in Classics from Kenyon College and has over five years of experience in IT. His work has appeared on Charge Shot!!! and AnandTech, and he records a weekly book podcast called Overdue.